LLC/Corporation combination as structure for managing investments
I have recently incorporated two separate entities to hold and manage my stock and options (and any other) investments.
The first entity, a Limited Liability Company, exists solely as a holding company for my investments. The LLC has two members: 1) the corporation (described below) and myself, as an individual. The capital gains produced by the entity flow directly to the corporation.
The second entity (the corporation) exists to manage the investments made by the LLC. I am the sole owner of the corporation.
My plan is to use the corporation to take advantage of the deductibility of expenses incurred in managing my investments. Many of these expense deductions would not be possible if I was to manage these investments as an individual. I plan to keep any capital gains (profits) from my investments in the corporation.
I have two main questions regarding the set-up of this structure:
As a member of the LLC, can I make distributions to myself without allocating a percentage share of ownership in the LLC? (As an individual, I would simply be a member, not an owner of the LLC. The Corporation would be sole owner of the LLC.)
When funding these entities, would I make a loan to the corporation, then lend from the corporation to the LLC?
I appreciate your advice!